building a laneway house?

A laneway house is a small detached residential infill house that typically fronts on the lane of a larger principal house.

It's important for property owners to understand their options before building a laneway house or buying a property with a laneway house. Here is some information about the tax implications of laneway houses and scenarios outlined by the Canada Revenue Agency (CRA).

1. You own a principal residence and you hire a builder to build a new laneway house. You then rent or lease the laneway home to a non-relative.

The CRA considers you to be the builder, and to have:

sold, repurchased, or 'self-supplied' the laneway house at its fair market value;

sell-assessed and collected the GST on the sale; and

paid the GST on the repurchase of the laneway house

You must account for the GST on the GST/HST return (self-accessing), even if you are not a GST/HST registrant. You may:

This representation is based in whole or in part on data generated by the Chilliwack & District Real Estate Board, Fraser Valley Real Estate Board or Real Estate Board of Greater Vancouver which assumes no responsibility for its accuracy - Listing data updated on November 19, 2018.